by Mia Wallace 01
Sep 2020
What does it mean to be a
speciality broker, and what are the strengths of having a defined value
proposition? According to Stephen Cross (pictured), founding partner and head
of innovation at the boutique specialist (re)insurance broker, McGill and
Partners, the strategy of his business from the beginning has been to
concentrate on where it can truly add value – its placement skills for complex
and specialist risks that require deep subject matter expertise.
“While other firms have a
breadth of incredible services and have decided to go wide in their offering,
we have taken the decision to go narrow and deep, focusing on our clients and
their most complex risks, in addition to their traditional specialty risks,” he
said. “We have established seven specialties with hand-picked colleagues who
are market leaders in their fields, and while we may grow to have 10 or 12
specialties, we will not have many more than that.”
Cross noted that this,
along with McGill’s lean corporate structure, creates an environment where the
team can focus 100% of their time on understanding client needs and delivering
results. It can be tough for sophisticated clients to have an appreciation of
some the complexities of the specialty insurance value chain and working with
an independent broker with deep relationships is key to them successfully
navigating their way through this in a successful and unconflicted manner.
“Our proposition,” he
noted, “underpinned by cloud-based technology, simply means that we create
efficiencies, eliminate duplication and are 100% focused on transparency and
alignment with our clients and markets.”
Outlining how the need for
speciality placement has been further highlighted by the COVID-19 pandemic,
Cross noted that the crisis is expected to be the largest non-life catastrophe
loss the insurance market has ever experienced. Pre-COVID, he said, the market
was already in a state of hardening and the long-term economic impact will be a
test of the capabilities of brokers.
“Truly understanding the
business of the client, not just their risks is also essential as a wholistic
picture is key,” he said. “There are broader economic issues at play which
will, in turn, affect insurance requirements. Now more than ever, clients need
a specialist broker that fundamentally understands their business, has deep
expertise and excellent market relationships that will navigate the value chain
to secure cover at the best value.”
Looking ahead, he said,
McGill expects to see an increase in demand for pandemic coverage and
preparation for similar, existential risks. The insurance industry, meanwhile,
will need to work with governments and businesses to develop new ways to deal
with this type of crisis. The business is constantly looking for innovative
ways to cover complex risks and ensure it is pioneering new ways of thinking.
He highlighted
McGill’s support of the creation of Syndicate 1796, developed by
Parsyl, to insure the transportation of a COVID-19 vaccine.
“It is a critical
initiative,” he stated, “combining innovative insurance and technology-driven
solutions to help improve supply chains and ultimately save lives. It
represents our bold and change-making spirit.”
McGill is founded on a
“contract of trust”, Cross said, and this has been critical to its success.
With no fixed working hours and unlimited holidays, there is an innate
flexibility and diversity to the business. Rather than having set-out values
and mission statements, the team instead have chosen to create commitments
which they make to each other and the business, and their overarching goal is
to be bold, to be changemakers and to be one team without silos.
“It’s important to note
that we are pursuing one of the most ambitious M&A strategies ever
undertaken in the insurance broking world, it just happens to be focused on the
acquisition of talent, not of companies,” he said. “Often, when you acquire a
business, the legacy systems will come with it.
“Focusing instead on
acquisition of talent means that everyone who comes through our door adapts
very quickly to the McGill and Partners culture. We want to bring in people
with diverse backgrounds and expertise, but not outdated, legacy views; people
who will be open-minded about our tech-driven approach and about using
technology to better the way we work.”
As a new business, McGill
has had the opportunity to assess all the existing legacy processes and ways of
working in the industry with a fresh lens, he said, and has the desire to be
different in design in everything it does. Technology plays a key part in this.
New systems, software and hardware allow for a better user experience for its
brokers and clients but also encourage clean and efficient data capture across
the board.
“The market in the
undigitized form that it exists is inefficient and outdated,” he said.
“Companies need to be bold and embrace change across the whole business for
digitisation to truly take shape. We applaud Lloyd’s Blueprint and its digital
initiatives. It’s our view that we mustn’t just digitise outdated processes but
re-think the processes entirely with a purely digital lens.”
The COVID-19 crisis
required many businesses to pivot quickly and seamlessly to working from home
and has emphasised the need to fully embrace digital trading. This has been
McGill’s strategy from day one, he said, outlining how McGill recently
completed a highly complex deal on Whitespace. It is the biggest and most
challenging placement executed on the platform to date, covering 40 market
reform contracts for an Australian client.
“As we look to the future,
we think there will be a need for face-to-face interactions and meetings; they
are a crucial part of what we do,” Cross said. “However, the businesses that
thrive will be those that have robust and secure cloud-based operating systems,
the ability to transact 100% digitally and flexible working policies to ensure
their colleagues can operate from anywhere in the world. For us, it is about getting
the best result for our clients and, in our view, technology will help us do
that.”
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